Buyers choosing China for leather garments
05/05/2009
The chairman of the Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA), Fawad Ijaz Khan, has said that the country is losing its share of the leather garments market to China, at least in part because of China’s duty drawback system.
Duty that manufacturers pay on importing some materials into China is reimbursed by the government when those manufacturers send their finished products for export.
Mr Khan said that leather garment exports from Pakistan had declined by almost 26% as buyers sourced from China instead. The Pakistani government is providing a degree of help, but is offering exporters a duty drawback of only 2.4% compared to rates in China of between 13% and 15%.
He told local media: “We are studying how the Chinese government is able to provide 15% duty drawback. We feel it should not be more than 7% or 8%. For this we have engaged a consultant who has been preparing a detailed report of the Chinese leather garments industry.”
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